Stock Brokers
A stock broker is a broker who deals in shares.
He is a regulated professional broker.
A stockbroker buys and sells shares and other securities on behalf of their clients or investors who hire them.
In the US, the stock broker is simply referred to as a broker.
He is designated by FINRA as a registered representative.
This designation has to be earned by passing the FINRA General Securities Representative exam also known as the Series 7 exam.
He should also be employed by a registered broker dealer also known as brokerage firm.
This firm is typically a FINRA member firm.
Any transaction on a stock exchange must be done through a broker.
Stock broking service can be of three different types.
The first of the kind is execution-only service where the broker shall merely carry out the client's or investor's buy and sell instructions.
The second type would be advisory dealing where the stock broker advises his clients as to which shares to buy and which to sell and also when to buy and when to sell.
But he would leave the final decision in the hands of his client.
And the third type would be discretionary dealing and is a very crucial and responsible role that is played by the broker.
In this case, he would ascertain all of his client's investment objectives and then carry out all the dealing decisions on his behalf.
Stock brokers can also at times trade exclusively to serve their own purpose.
Knowing the ins and outs of the business, it is easy for them to select and trade after taking informed decisions.
They then call themselves dealers, stock traders or simply traders.
Nowadays, the concept of online stock brokers has become exceptionally popular.
With the increasing popularity of online trading, the online brokers have also gained worldwide recognition.
Each broker may differ in their services and features offered.
A lot of research goes into finding a broker suitable for your needs and goals.
There are certain criteria on the basis of which you can decide which broker to choose from.
The brokers differ in the rates they charge for completing each deal through your online account.
These rates are mostly negotiable and you should opt for the one that suits your budget and trading style.
There might be a lot of hidden expenses involved in the account fees.
You should have a frank and open discussion and also compare the different brokers before choosing the right one for yourself.
Your online broker should also be reachable 24 hours a day and also you should have instant access to your money that is held in the cash account of your broker.
Most would agree that it is wiser to go with discount brokers rather than full service brokers as they charge much less; nearly one twentieth of the amount that full service brokers charge.
Full service brokers also charge annual maintenance fees and might also charge a percentage of your total assets.
A comparison with actual figures might be useful for the investors to gain an insight as to how expensive can the service provided by the full service brokers be.
Where a typical discount broker would charge around $3 to $20 for a single online trade, a full service broker would charge around $150.
Brokers offer a lot many other services besides the basic buy and sell.
In case you are opening a brokerage account with a bank, you might enjoy the benefits of services such as money market sweeps, check writing and bill payment, Visa cards, direct deposit and ATM cards.
In case you choose a brokerage with its own bank affiliate, you will find it easier to transfer money between brokerage and bank accounts.
Brokerages also aid in research by providing in-depth analyst reports, real-time quotes and detailed financial data as special incentive to their clients that can influence the client's choice of investment to a great extent.
Thus brokers play a significant role in a stock trader's life and finding the right broker might open the doors of wealth for you by fetching you attractive returns through wise choice of shares and other useful advice.
He is a regulated professional broker.
A stockbroker buys and sells shares and other securities on behalf of their clients or investors who hire them.
In the US, the stock broker is simply referred to as a broker.
He is designated by FINRA as a registered representative.
This designation has to be earned by passing the FINRA General Securities Representative exam also known as the Series 7 exam.
He should also be employed by a registered broker dealer also known as brokerage firm.
This firm is typically a FINRA member firm.
Any transaction on a stock exchange must be done through a broker.
Stock broking service can be of three different types.
The first of the kind is execution-only service where the broker shall merely carry out the client's or investor's buy and sell instructions.
The second type would be advisory dealing where the stock broker advises his clients as to which shares to buy and which to sell and also when to buy and when to sell.
But he would leave the final decision in the hands of his client.
And the third type would be discretionary dealing and is a very crucial and responsible role that is played by the broker.
In this case, he would ascertain all of his client's investment objectives and then carry out all the dealing decisions on his behalf.
Stock brokers can also at times trade exclusively to serve their own purpose.
Knowing the ins and outs of the business, it is easy for them to select and trade after taking informed decisions.
They then call themselves dealers, stock traders or simply traders.
Nowadays, the concept of online stock brokers has become exceptionally popular.
With the increasing popularity of online trading, the online brokers have also gained worldwide recognition.
Each broker may differ in their services and features offered.
A lot of research goes into finding a broker suitable for your needs and goals.
There are certain criteria on the basis of which you can decide which broker to choose from.
The brokers differ in the rates they charge for completing each deal through your online account.
These rates are mostly negotiable and you should opt for the one that suits your budget and trading style.
There might be a lot of hidden expenses involved in the account fees.
You should have a frank and open discussion and also compare the different brokers before choosing the right one for yourself.
Your online broker should also be reachable 24 hours a day and also you should have instant access to your money that is held in the cash account of your broker.
Most would agree that it is wiser to go with discount brokers rather than full service brokers as they charge much less; nearly one twentieth of the amount that full service brokers charge.
Full service brokers also charge annual maintenance fees and might also charge a percentage of your total assets.
A comparison with actual figures might be useful for the investors to gain an insight as to how expensive can the service provided by the full service brokers be.
Where a typical discount broker would charge around $3 to $20 for a single online trade, a full service broker would charge around $150.
Brokers offer a lot many other services besides the basic buy and sell.
In case you are opening a brokerage account with a bank, you might enjoy the benefits of services such as money market sweeps, check writing and bill payment, Visa cards, direct deposit and ATM cards.
In case you choose a brokerage with its own bank affiliate, you will find it easier to transfer money between brokerage and bank accounts.
Brokerages also aid in research by providing in-depth analyst reports, real-time quotes and detailed financial data as special incentive to their clients that can influence the client's choice of investment to a great extent.
Thus brokers play a significant role in a stock trader's life and finding the right broker might open the doors of wealth for you by fetching you attractive returns through wise choice of shares and other useful advice.
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